Case Study – The Rigors of Relationship Marketing

SUBMITTED BY:-

Group Number 4(CRM-5)

Members:-
Eshan Bhateja- F39(Group Leader)
Rana Shamsher Jang-F-44
Mansur Alam- G-20
Pratibha Sehgal- G-34
Ace  Ace Toys – Blondie Dolls – 60% of the
Turnover
Toys
 Manufacture Market 80 types of Toys

 Target age group 3-13

 150 types of Blondie Dolls

 Market growth 12% - Ace growth 15% 1995-

96

 Falls to 12% in last 2 yrs

 Efforts of Relationship Marketing of

Blondie Friends Club Failed

 Sridhar Venkitesan hired as Vice-

President(Marketing)
STRENGTHS WEAKNESSES

Market Leader with 9% share Limited understanding of Target

Customer

Foreign Collaboration – La Belle Inadequate Range of Products –

inadequate range & diversity of dolls

Non-toxic plastic and no rough edges Fluidity of End-User Segment – girls grow
(Safety & Quality) up to become adults

High Margins of 35% from Premium Predominance of Unorganized Sector

Products
OPPORTUNITIES THREATS

80 % Sector Unorganized -> Large Competition from Video Games,

Market Potential Amusement Parks, TV & PCs

Ability to influence Industry Structure Accelerating Rate of Product

Obsolescence

Emergence of New Advertising Media Declining Sales of Flagship Brand

Growing Market in Toy Accessories Stiff Competition from Trans nationals

5 times more expensive to get a new customer than
retain an old one.

Difference in Markets
 West – toys for entertainment and mental development
 East – toys to keep child preoccupied.

More toys sold through gift-shops than through

dealers or exclusive outlets.

High Margins of 35% should have lead to

incorporating and expensive and focused approach for
sales promotion like advertising.
Relationship Marketing steps :-
 Advertising helps in bringing about customer awareness,
relationship marketing brings in buyers.

 Promotion and dealer support is more important for toy

business than advertising.

 The success of relationship marketing depends largely on a

company’s perception of its sales transaction.

 Relationship marketing helps you to know your customers

more intimately, which can help you to redesign products and
fine-tune marketing operations.

 Nestle spends more than 1.5% of its turnover on Maggie club

where as shopper shop spends roughly 1.7%.
Revive the club and make sure it hits bulls eye this
time.

 Can be done through :

 Rigorous number crunching & thorough market research
 Make the club a dynamic entity
 More rewards and some more rewards
 Partner with non-competing product

Play a big role in a little girl’s world

Certainly YES!
If ace toys want to establish itself in the market and
stay ahead from competition in future, then it needs
various schemes like the Blondie friends club.
It is well known that the Indian toy market is in a
early stage as people are slowly changing their
perception towards western world where toys are
means for entertainment and learning.
The backbone of any relationship marketing
programme is a customer group who are very close to
it and are easily excited by the incentives and rewards.
In the Blondie club, the members will demand
immediate gratification, constant attention, and
perennial excitement
Indeed, the best way to expand the Club will be to
focus on Customer Retention Strategy and a
focused group of customers who are ready to buy its
products
 Expenditure for a programme is never estimated as a
percentage of turnover, rather as a percentage of each
customer's value to the company over his, or her, lifetime.
It is based on the expected purchase value of a member
over a period during which he/she buys the product.
 In case of toys market the customer has the demand for
the product for almost 5-10 years till she is in playing
school days. If we look at the issue of costs from that
perspective, and work out the corresponding numbers,
lack of funds would never be a problem. In fact, such an
expenditure is an investment in value addition
Need to come up with some innovative ideas like
organizing different sorts of cultural and sports
event in schools.
They also can provide free passes to Amusement
parks .
It should increase it’s product lines.
In order to revive the relationship marketing drive
the Club can think of giving its members parting
gifts as they enter adulthood and pass on the
membership to any other child who would be the
new brand ambassador for the company.
Pampering the customer is the most essential in
case of Relationship Marketing.

As the target customers are Children and they

need lots of pampering which can easily be
achieved through gifts and other incentives .
Bringing a consultant is not a great idea as it would
bring a clash in decision making. Mr. Venkitesan
has a great experience in relationship marketing and
that would certainly come handy in developing a
strategy for ace toys in developing a gameplan for
relationship marketing.
A task force could be set up to oversee this job of
CRM and the advice of a consultant may be taken for
replying and reviewing the Blonde club magazine